Visitors to the National Gandhi museum in New Delhi can pick up souvenirs of the great man for a snip: a replica of his watch goes for 800 rupees (£11) in the gift shop, a pair of leather sandals is 450 rupees, while a copy of Gandhiji's spindly wire spectacles can be had for 450 rupees.

In New York, matters are more expensive, more complicated. An auction of the real artefacts from the life of Mohandas Karamchand Gandhi was cancelled at the last minute today after days of high-level brinksmanship.

Lot 364 in the sale of Important Collectors' Wristwatches, Pocket Watches & Clocks at Antiquorum Auctioneers on Manhattan's East 57th Street is listed simply as Mahatma Gandhi's Pocketwatch. "Formerly owned by Mahatma Gandhi, political and spiritual leader of India," reads the sales catalogue. "Accompanied by Gandhi's sandals, bowl, plate, glasses, images of Gandhi and letters of authenticity." A photograph reveals the articles in stark simplicity: the brown sandals, given to a British army officer in 1931, are battered; the bowl is a simple metal one on a plate; the glasses sit alongside a tatty black case; and the pocket watch is mundane.

But for millions of followers of Gandhi, the objects' simplicity belies their significance. The proposed sale by their legal owner, Los Angeles-based film-maker, peace activist and collector, James Otis, has roused emotions in India, where many consider the articles to be part of the national heritage.

Otis said tonight that he was cancelling the auction after uproar in India. "I never intended for my actions to cause this controversy," he said in New York, announcing his decision to withdraw the items from sale. "I pray the outcome is positive and one that Gandhi would approve of."

On Wednesday, the high court in Delhi issued an injunction to stop the sale, at the request of Gandhi's legal heir, the Navajivan Trust publishing company. The Indian government said it had passed news of the injunction to Antiquorum Auctioneers in Manhattan, which decided to ignore the injunction and go ahead.

The Indian government rejected an offer by Otis to exchange the items in return for "a dramatic gesture" for India's poor, such as increasing spending on public healthcare, or backing a worldwide tour to promote non-violence. He reportedly rejected attempts by the Indian government to simply buy the objects.

Otis said he was motivated by ethics, not greed. His call for a major initiative to improve the lives of the impoverished third of India's 1 billion population would, he said, "demonstrate to the entire world the commitment of the Indian government to following the principles of Gandhi's historical message".

Alternatively, he suggested the government could finance a series of international educational events using the mementoes to promote Gandhi's principles of non-violence, "to reach at least 78 countries, one for each of the number of years Gandhi graced us with his life on the planet". The Indian government refused, arguing that Gandhi himself would have disapproved of the attempt to interfere in the country's sovereign affairs.

A meeting between the two parties scheduled for this morning at the Indian consul general's office in New York failed to take place, and tonight bidders began to gather at the auction house. Forty had registered.

Among them was 72-year-old Himadri Roy, who had placed a garland of flowers around Gandhi's head as a boy of 10, only for Gandhi to remove them and place them on him. He still has the flowers.

The sandals, bowl, watch and spectacles, with a reserve price of $20,000-$30,000, are believed to have been given away by Gandhi in his lifetime. The bowl and watch went to his favourite great niece, the sandals to a British army officer in return for photographs taken in Aden before the Indian independence talks, and the spectacles to an Indian army officer who asked about his inspiration - Gandhi reputedly handed him the spectacles, saying they were "the eyes" which gave him the vision to free India.

Ambika Soni, India's cultural affairs minister, said: "We would like to get them back through talks with the owner, and if the talks fail, we will buy them back ... for Gandhiji's motherland."

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at 15.51 EST on Thursday 5 March 2009.
It was last modified at 17.48 EST on Thursday 5 March 2009.
It was first published at 06.04 EST on Thursday 5 March 2009.